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It's interesting that the loss to the Bank of England is attributed almost entirely to Soros. If you accept that the fixed rate was unsustainable then even with
by seizethecheese 12y ago
It's interesting that the loss to the Bank of England is attributed almost entirely to Soros. If you accept that the fixed rate was unsustainable then even without Soros the Bank of England would have been forced to defend an untenable position, and eventually would have lost enough to give up. It's reasonable to assume that the acceptable losses for the Bank of England would have been similar whether they were sustained in one day or over the period of weeks or months.
Soros' brilliance was to see the inevitable and take almost the entire opportunity for himself.
- the_watcher 12y agoI wouldn't call myself a Soros fan, but I don't think people generally blame him (alone, at least). Most people I've heard from on this recognize the gross incompetence of those running the Bank of England, and the biggest problem anyone has with Soros is on moral grounds more than anything (exploiting incompetence to essentially take money from British taxpayers without providing them anything in return).
- seizethecheese 12y agoThe article's first sentence: > In 1992, George Soros brought the Bank of England to its knees. You're right that many well-informed people don't blame Soros alone, but the sentence above pretty well encapsulates the mythology surrounding this story. It would be more accurate to say: "the day George Soros hastened the collapse of the ERM."
- marvin 12y agoThe big question is whether the Bank of England would have sold so much GBP if this was allowed to happen gradually rather than overnight. The real problem is still political incompetence, but there's no guarantee that the losses of the British taxpayers would have been equally large if Soros's fund had not made such a spectacular short which sparked a political pissing match.
- seizethecheese 12y agoDefinitely. It's plausible that without Soros the losses would have been much smaller. On the other hand, it is possible that a slower burn would have enabled political inaction and therefore more losses!